When This Ends, Everybody Gets Hurt
Central banks around the globe have taken us all into unchartered territory, where the possible paths boil down to a binary outcome: either it all works out or it doesn’t.
Unfortunately, the ‘it all works out’ outcome has a very low probability of actually happening; so the binary outcome isn’t equally weighted like a coin toss. By ‘working out’, here’s what the central banks all striving (praying?) for:
- Inflation of 2% to 3% per year
- Economic growth of at least 6% per year (nominal) and a real (inflation adjusted) rate of 3% per year.
The reason that the central banks want all of this growth and inflation isn’t because it’s good for you, me, or anybody we know. Instead, the bankers need it because that’s what our exponential money system requires.
Slaves To The System
It bears repeating, inflation is not rising prices — those are symptoms of inflation — but instead is the expansion of the existing stock of money and credit. If we observe the symptom of ‘rising prices’, then that means the underlying mechanism of expansion of credit (mainly) and money (less important because the money supply is a only fraction of the volume of credit) is functioning.
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